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New MIFID II rules must be fully scrutinised

Proposals brought out yesterday by the European Securities and Markets Authority (ESMA) that would implement the update to the Markets in Financial Instruments Directive (MIFID) must be fully scrutinised to ensure they accurately reflect what was agreed by lawmakers, Dr Kay Swinburne MEP, European Conservatives and Reformists Group economics spokesman, has warned.

Agreed three years ago, MiFID II updated EU law to bring Europe-wide financial markets legislation up to date with modern technology. The so-called ‘level 2’ rules released by ESMA set out measures to ensure its implementation. They will now be looked at by the European Commission, who have three months to reply to ESMA to let them know whether they will be amending them, or adopting them as delegated acts. The European Parliament will also be scrutinising them to see whether they are in line with the ‘level 1’ text agreed by lawmakers. The parliament will provide a formal input by the 19th October.

Dr Kay Swinburne said:

“It is the Parliament and Council’s role to ensure that the detail of the rules are fully in line with what they intended when agreeing the initial legislation. If we are not satisfied, the parliament has the power to reject the level 2 rules and send them back for redrafting.

“I am particularly concerned about the way in which ESMA has carried out the work on complicated calibrations like the transparency regime for corporate bond markets. The very clear legislative intent was to add transparency where possible but above all not disrupt trading in a market that is so vital to funding companies across the EU.

“The devil really is in the detail when it comes to these calibrations and specific thresholds like the “Size Specific to the Instrument” may sound complicated and technical, but should they be set at the wrong level; their effects will be felt in a very tangible way.

“We spent a great deal of time preparing this legislation. Now we need to ensure it is implemented exactly as elected representatives intended.”

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